Dennis S.
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- Nov 22, 2003
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It's a spin off from another thread, but I wanted to share my philosophy and thoughts on a topic near and dear to home, pertaining investments and stocks.
There isn't a forum for finance or advice-related topics, so I'm gonna thrust this in here and let the mods place it where it fits best.
Investing and buying stocks is a game that simultaneously excites people and scares the poop out of them. There are so many stocks out there -- how do you choose the right one? Most people who just want to get into the game pick a stock they're emotionally attached to -- "I like their name," or "I saw this cool product they have out now," or even, "This stock's been going up like crazy in the past few weeks -- I'd better buy now!"
All three reasons I've outlined are HORRIBLE reasons to buy a stock. Seriously. You'd have more fun just making a pile of money, dousing it with gasoline, and lighting it all on fire.
But seriously, I'll let on a few tips that I use for myself:
1) Don't ever buy stocks on someone's advice to "buy now!" If you don't have time to research the stock and get a feel for the company, you don't want to get in. It's a common tactic -- "buy now! The price'll go up any day now!" The best stocks are the ones that'll perform over time, not instantly.
1a) Beware of "pump and dump" schemes -- someone'll talk up a stock, saying it's gonna get hot soon, and people start buying it, driving up the price. People start seeing the price go up, and believe it's happening right now, and also start to buy. Soon, the "dumper" part of the scheme sells their investment, and then soon after that, people start realizing their folly of investing in an stock that's going nowhere and start to sell. What happens when there are more sellers than buyers? That's right, the price starts to go down.... wayyyyyyyyy down. The dumper doesn't care -- he got out early when the stock was going up!
2) Learn the company you're buying. Know the officers, the board, the important players, their products. The stocks that perform are the ones you want, not the style over substance ones. Sure, Apple looks flashy, but you darn well bet their iPods filled that portable need for music in the world. So what's next? VOIP? Biotech? Good ol' fashioned commodities? Oil? Gold? The money goes where the needs are.... Study the world to learn what those needs are going to be!
2a) Study those financial reports, and learn what's a realistic forecast versus someone pulling numbers out of their bum. I'm going to post in the morning on my study of GoAmerica's recent analysis by an internet blogger called zibeaster. I'm attaching my tables to this post so that you all can look at it anytime. Parts of my rebuttal are in there. T'care!
There isn't a forum for finance or advice-related topics, so I'm gonna thrust this in here and let the mods place it where it fits best.
Investing and buying stocks is a game that simultaneously excites people and scares the poop out of them. There are so many stocks out there -- how do you choose the right one? Most people who just want to get into the game pick a stock they're emotionally attached to -- "I like their name," or "I saw this cool product they have out now," or even, "This stock's been going up like crazy in the past few weeks -- I'd better buy now!"
All three reasons I've outlined are HORRIBLE reasons to buy a stock. Seriously. You'd have more fun just making a pile of money, dousing it with gasoline, and lighting it all on fire.
But seriously, I'll let on a few tips that I use for myself:
1) Don't ever buy stocks on someone's advice to "buy now!" If you don't have time to research the stock and get a feel for the company, you don't want to get in. It's a common tactic -- "buy now! The price'll go up any day now!" The best stocks are the ones that'll perform over time, not instantly.
1a) Beware of "pump and dump" schemes -- someone'll talk up a stock, saying it's gonna get hot soon, and people start buying it, driving up the price. People start seeing the price go up, and believe it's happening right now, and also start to buy. Soon, the "dumper" part of the scheme sells their investment, and then soon after that, people start realizing their folly of investing in an stock that's going nowhere and start to sell. What happens when there are more sellers than buyers? That's right, the price starts to go down.... wayyyyyyyyy down. The dumper doesn't care -- he got out early when the stock was going up!
2) Learn the company you're buying. Know the officers, the board, the important players, their products. The stocks that perform are the ones you want, not the style over substance ones. Sure, Apple looks flashy, but you darn well bet their iPods filled that portable need for music in the world. So what's next? VOIP? Biotech? Good ol' fashioned commodities? Oil? Gold? The money goes where the needs are.... Study the world to learn what those needs are going to be!
2a) Study those financial reports, and learn what's a realistic forecast versus someone pulling numbers out of their bum. I'm going to post in the morning on my study of GoAmerica's recent analysis by an internet blogger called zibeaster. I'm attaching my tables to this post so that you all can look at it anytime. Parts of my rebuttal are in there. T'care!
